Nathan Hayes

Nathan Hayes is the Manager of Business Development for Red Tray and Editor of sellingtoecps.com.

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How Much Staff Does A Solo OD Need?

Posted on May 20, 2010
Filed Under Articles |

We got a great question over at Dr. Hayes’s blog, that I want to pass on to you this week:

Dear Dr. Hayes,

I recently moved to a new location and want your advice on my doctor to staff ratio. I work 26 hours per week and see an average of two full exams and one follow-up visit per hour.

My current staff includes three ‘full-time equivalent’ employees (FTE’s). I have a full-time optician, a full-time receptionist, a part-time receptionist who works 20 hours per week in a billing person who averages 15 hours per week.

Please let me know your thoughts on how I can most efficiently staff my office.

Thanks so much for your help.

Michael Collins, OD (name changed)

Dear Dr. Collins,

I use three metrics to evaluate overall staffing levels and productivity for private practice OD’s:

1. Annual dollar production per employee. For example: $125,000 per year

2. Hourly dollar production per employee. For example: $80 per hour

3. Total staff compensation as a percent of collected gross revenues. For example: 20%

For this article, we’ll look at just your annual production per employee. I have found over the years that a reliable rule of thumb for the amount of non-OD staff needed in a traditional dispensing practice is one full-time employee per $125,000 of annual gross revenue.

I’ll make some assumptions about your practice production. If you see two patients per hour for 27 hours per week that equals 54 patients per week.

If you work 48 weeks per year, that means you’ll see 2592 patients (48 weeks X 54 patients = 2592).

A reasonable billing average for a dispensing practice over the course of a year is about $250 per patient. At that rate, your annual gross revenues would equal $648,000 ($250 per patient X 2592 patients = $648,000).

Now, let’s divide your gross of $648,000 by our $125,000 rule of thumb. $648,000/$125,000 = 5.18.

By this metric, an appropriate staffing level would be approximately 5 full-time employees. (Note: this is non-lab employees only. Any time you pay employees to cut, edge and surface should be included in your cost of goods expense, not staff overhead.)

Of course, many variables come into play such as; how many of those 54 patients each week actually get glasses? And, how much contact lens and medical work you do?

You only have three FTE’s which means your staff is highly productive. It also tells me that you are ready to hire one other person if you want to grow your volume.

I hope this helps!

Best Regards,

Jerry Hayes, OD

What do you tell your accounts about how much staff they need? Post a comment below or send me an email.

Disclaimer: The information and opinions contained on this site are for discussion purposes only and are NOT intended to serve as legal, accounting or investment advice. ©2010 Red Tray. All rights reserved. Not to be reproduced without written permission of the author.

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